NGEx Minerals' Lunahuasi Project: Catalyst-Driven Upside in a Dual High-Grade Copper-Gold Asset

The Lunahuasi Project in Argentina's San Juan province is rapidly emerging as a cornerstone asset for NGEx Minerals (NGQ.TO), combining high-grade copper-gold-silver intersections with the potential of a large-scale porphyry system. Recent drill results underscore the project's dual-value proposition: near-term resource expansion through high-sulphidation epithermal (HS) zones and long-term upside from an underexplored porphyry system. With aggressive exploration funded by a robust balance sheet and critical catalysts on the horizon—including Phase 4 drilling and potential resource upgrades—NGEx presents a compelling speculative opportunity.

Technical Catalysts: High-Grade Intersections and Porphyry Continuity

The Phase 3 drilling campaign, completed in May 2025, delivered exceptional high-grade results that expand Lunahuasi's known dimensions and validate its structural model. Key highlights include:
- Drillhole DPDH038: A 16.35-meter interval grading 12.97% CuEq, including a 6.4-meter subset at 23.93% CuEq—among the highest grades reported to date. This extends high-grade mineralization 30 meters north, increasing the strike length to 120 meters and leaving boundaries undefined.
- Drillhole DPDH039: A 13.0-meter interval at 9.96% CuEq within a broader 400.4-meter zone grading 1.72% CuEq, demonstrating vertical and lateral continuity of the porphyry system.
- Porphyry System Depth: Drillhole DPDH027 intersected 1,619 meters of mineralization at 0.87% CuEq, indicating the system's vast depth potential. Such porphyry systems often host billions of tons of low-grade material, creating multi-decade mine life possibilities.

The deposit now spans 1.2km north-south, 1.7km east-west, and 1.2km vertically, with mineralization remaining open in all directions. Structural analysis confirms that high-grade veins are controlled by northeast-trending, steeply dipping corridors, guiding exploration toward untested zones.

Why This Matters:
- HS Zone Near-Term Upside: Shallow, high-grade intersections (e.g., DPDH038's surface-near mineralization) suggest bulk-minable oxide zones, which could provide early cash flow.
- Porphyry Long-Term Potential: The 1,619-meter-deep porphyry system adds a second, large-scale target. If fully defined, this could transform Lunahuasi into a multi-metal, multi-stage mine.

Financial Strength: Funding Aggressive Exploration

NGEx's financial position provides a solid foundation for advancing Lunahuasi. As of March 2025, the company held $124.2 million in cash and $45.6 million in short-term investments, with no debt. This liquidity allows for:
- Phase 4 Drilling: Scheduled to begin in October 2025, this phase will target expanding the HS zone strike length, probing deeper porphyry zones, and refining the geological model.
- No Near-Term Dilution Risk: Exploration costs in Q1 2025 rose to CAD 36.4 million (up from CAD 22.5 million in Q1 2024), but the balance sheet supports continued spending without equity raises.

Catalysts for Near-Term Value Accrual

1. Phase 4 Drilling Results (2025–2026): Data from this phase will refine the porphyry system's boundaries and test high-priority targets. Positive results could trigger a re-rating of the project's valuation.
2. Resource Estimate Upgrade (2026): As assays from the remaining 8 Phase 3 holes (6,082 meters pending) come in, the resource base could expand significantly. A robust update could position Lunahuasi among the top-tier copper-gold projects globally.
3. Commodity Price Resilience: With gold grades exceeding 23 g/t in some intervals, Lunahuasi's multi-metal profile reduces reliance on copper prices alone—a key advantage in volatile markets.

Risks and Considerations

• Assay Delays/Downgrades: Pending results could underwhelm, though the consistency of structural controls reduces this risk.
• Regulatory Hurdles: Argentina's permitting process could introduce delays, though the government has historically supported mining development.
• Commodity Volatility: Copper and gold prices remain critical to the project's economics, though the HS zone's high grades offer a natural hedge.

Investment Thesis

NGEx presents a high-risk, high-reward speculative play with catalyst-driven upside. Key triggers—Phase 4 drilling and resource upgrades—are imminent, and the company's financial strength minimizes execution risk. For investors comfortable with exploration equity volatility, Lunahuasi's dual-value proposition (HS near-term, porphyry long-term) justifies a buy rating, with upside potential tied to positive assay releases and resource definition.

Recommendation: Consider accumulating NGEx shares ahead of Phase 4 drilling, with a focus on the project's scalability and multi-metal profile. Monitor closely for catalysts in late 2025 and 2026.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct independent research or consult a licensed professional before making investment decisions.